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Report of Management Accounting- Unicorn Grocery

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Added on  2020-02-17

Report of Management Accounting- Unicorn Grocery

   Added on 2020-02-17

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Management Accounting
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INTRODUCTIONManagement accounting refers to the sourcing, analysing, communicating along with theuse of decision making which is related to finance as well as non-financial information or datawhich helps in generating more profit for business organisation. Management accounting helpsin collating information which include revenue, cash flow along with the outstanding debts sothat they can produce trend reports as well as statistics which is important for the company to domanagement on the daily basis and make appropriate business decisions (Baldvinsdottir,Mitchell and Nørreklit, 2010). Management accounting is depend on the cost along with thefinancial accounting. Prime goal of management accounting is to allocate the resources in aproper and efficient manner. The present report is based on Unicorn Grocery which is offering aorganic food along with the sourced fruit and veg as well as fair trade deli products. It is basedon the core principles of co-operative organisation in that the business is owned and run by itsemployees which helps in generating maximum revenue. In the below mentioned report,discussion based on concept of administration accounting as well as different type of accountingsystem related to management (Why lean accounting?, 2017). Along with this discussion onvarious tools and techniques which is adopted by business entity for accounting reporting.TASK 1P1 Concept of management accounting and different systemManagement refers to the process which helps business entity in gathering theinformation and all the processing which is done by the qualified accountant which is having aaim to supply the qualitative information to the managers and make proper decision. Along withthis all the decisions which is to be taken by the employees or managers of Unicorn Grocery itshould be in a budget and completed in a specified time (Bennett, Schaltegger and Zvezdov,2013). Business entity have to use management accounting which aid in managing all thebusiness operations or activities of the company which includes better marketing strategies,better risk management etc. Accounting system which is related to administration always focuson cost and that is related to the manufacturing of products and services in Unicorn Grocery. Themost common system that involves the conventional cost accountancy, throughput accounting,lean accounting along with the transfer pricing. These are the different system which helps thebusiness entity in reducing the cost while producing the products.
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Accounting system help the company in making correct decision by doing appropriateplanning and the performance on the basis of management system. Along with this it providesthe expertise in financial reporting as well as controlling which helps in managing andformulating the strategies. It helps in tracking the cost by using the job order method or processcosting methods (Busco, and Scapens, 2011). It helps in allocating the cost which are related todirect cost, direct labour, direct material along with the manufacturing overhead. The employeesof Unicorn Grocery have to produce homogeneous product for their consumers and by usingproject costing they can allocate the cost on the basis of distinctive processes. Accounting is a term which is used at the time of making changes in the business entityand by that they can control, measurement along with the management processes which aid insupporting the manufacturing and lean thinking (Christ and Burritt, 2013). It is a method whichhelps in reducing the cost by decreasing the waste and also assist in making appropriate decisionand measure the profitability. Accounting system can help the cited company to manage there financial transactions. itprovides the support to managers for making the correct decision which helps Unicorn Groceryin improving the profitability (Cinquini and Tenucci, 2010). Accountant of the company focuseson identifying different constraints by using different production system of the businessenterprise. Constraints which are included in the production system are insufficient level ofmaterials, labour and production capacity. It succour in increasing the manufacturing volume bydecreasing cost on single unit which is produced by the employees. This system helps in makingall the arrangements which are related to the different business entities. By using this method,companies will cost the goods appropriately via different departments (Contrafatto and Burns,2013). In this system, transfer price includes the variable cost and opportunity cost. Opportunitycost describe the amount of money or cost which assist in outsourcing the production. By usingthe transfer pricing system, Unicorn Grocery attain the maximum benefits at the time of highcompetition.Different accounting system:1. Inventory management accounting– To do the creation procedure stock is required in anassociation. For this it is extremely essential that administration of same is done in such a way, tothe point that compelling utilization of stock is done as such that yield can be augmented.Henceforth, the given technique helps in keeping up the suitable level of stock in the association.
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